# Capital Pool

<figure><img src="/files/aTItsRSvSJVdEOLNt3qF" alt=""><figcaption></figcaption></figure>

Both the [Reward ](/dein-system/reward-pool.md)and the Capital pools are internal contracts within the DEIN protocol. In other words, users cannot interact directly with those pools, however, they significantly enhance the protocol's usability and capital efficiency, ultimately generating value for the users.

## What is the Capital pool?

[The Capital Pool](broken://pages/vhpwf9ESkIVV04zdJXa7) is a DEIN-platform-owned contract that manages and distributes funds both internally and externally. Responsible for Collateral withdraws, and Policy Payouts, as well as for investing in low-risk, 3rd party DeFi protocols to generate protocol-owned yield. Its “liquidity cushion” is rebalanced daily to always guarantee continuous operations and financial liquidity.

{% hint style="info" %}
Capital Pool is an administration and investment vehicle, that interacts with users and other Decentralized Finance crypto protocols.
{% endhint %}

## **Doesn't this expose the capital to extra risk?**

Although this may add an extra layer of risk, the Capital Pool allocates funds **only in the most well-known, tested, and liquid protocols to bring the risk down to a minimum.**

## **How do Underwriters benefit from this?**

The yield generated by the Capital Pool can be used to issue buybacks to refuel the Reward Pool, which will be instrumental in helping both the stabilization of the DEIN token price as well as the increase in yields for Underwriters' and enticing incentives across the DEIN platform.&#x20;

{% hint style="info" %}
Further down the line, the DEIN DAO will be able to operate and decide what to do with the yield generated by the Capital Pool. Some of the potential ideas include executing DEIN buy-backs from exchanges or deploying the yield as liquidity into different protocols.
{% endhint %}


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